If 60% have $250k on average, even if the other 40% have nearly nothing, that puts the average at about $150k. The numbers don't make sense because many 40 year olds have a net worth of several million $. Just shocking a bunch into a 401k for the past 18 years woukd give you $1M.
You'd be shocked at how many college grads don't save up in their 401k or even have an IRA. I know plenty of people who make over 6 figures who contribute nothing to their 401k, not even for the match. I also know many people who dipped into their 401k when they were unemployed to live off of, to pay for their kid's wedding or car etc. The average American is irresponsible and needs to be bailed out, hence the student loan forgiveness talks.
Same. I have a friend who makes around $150,000/year and lives paycheck to paycheck and has no investments of any kind. I tried to explain the basics to her, and all I got was deer in headlights. It is strange to me how many people, sometimes even supposedly smart people, are so terrible with personal finance.
As a former financial planner who knows the exact retirement savings of hundreds of people, averages mean nothing.
The amount of money someone has saved by a particular age is all over the place. There are plenty of people age 40 who have $200,000+ in retirement savings and there are also plenty of 40 year olds who are completely broke.
There really is no "average" amount of savings at any age, even if a mathematical formula says that's the average.
As a former financial planner who knows the exact retirement savings of hundreds of people, averages mean nothing.
The amount of money someone has saved by a particular age is all over the place. There are plenty of people age 40 who have $200,000+ in retirement savings and there are also plenty of 40 year olds who are completely broke.
There really is no "average" amount of savings at any age, even if a mathematical formula says that's the average.
the article posted in the op is talking about the median. if accurate, it's a meaningful metric.
As a former financial planner who knows the exact retirement savings of hundreds of people, averages mean nothing.
The amount of money someone has saved by a particular age is all over the place. There are plenty of people age 40 who have $200,000+ in retirement savings and there are also plenty of 40 year olds who are completely broke.
There really is no "average" amount of savings at any age, even if a mathematical formula says that's the average.
this is why we must not privatize Social Security. People are terrible investors and would muck it up.
On the flip side...the US median household income in 2004 was $44,389. If you were to invest 15% of that annually for 18 years at a 7-8% return, that number hits $239k-$266k. In theory the median net worth should be this or higher. But lots of folks don't save.
Most people do not invest close to 15% because they "can't afford it". They have to pay their high rent, car payment for a 40k car, buy the latest iPhone, drink Starbucks everyday, eat at fancy restaurants, and travel the world to pay pics on Instagram.
I have more than $200k+ at 40 but am continously told I need $3 million to retire, and it's just really defeating. I know part of that is financial advisors wanting to earn fees. But it's never enough, and I think a lot of people think why bother if I need that much when I can enjoy life now.
I'm not even that concerned with retirement. I just hate stuff.
I have more than $200k+ at 40 but am continously told I need $3 million to retire, and it's just really defeating. I know part of that is financial advisors wanting to earn fees. But it's never enough, and I think a lot of people think why bother if I need that much when I can enjoy life now.
I'm not even that concerned with retirement. I just hate stuff.
just save 10%-15% of your gross salary into a life-cycle fund and stop thinking about it. Usually in a 401k or IRA. That's it. That's all you have to do. Don't overthink this.
Although I suppose if you feel behind schedule at 40 you may need to save more than that.
As a former financial planner who knows the exact retirement savings of hundreds of people, averages mean nothing.
The amount of money someone has saved by a particular age is all over the place. There are plenty of people age 40 who have $200,000+ in retirement savings and there are also plenty of 40 year olds who are completely broke.
There really is no "average" amount of savings at any age, even if a mathematical formula says that's the average.
the article posted in the op is talking about the median. if accurate, it's a meaningful metric.
No, it's not meaningful. Do you know how many people have exactly $63,000 in retirement savings? A verrrry low percentage. Probably less than 1%.
Even if you expanded that slightly to plus or minus $5,000 and made it a range of $58,000 to $68,000, the percentage of people in that range would still be extremely low, probably less than 5%.
That $63,000 figure was just a number that a reporter used in order to write an article, but it has very little to do with people's real world savings.
Lesson to be learned - Stats, even if mathematically accurate, can be very misleading.
I have more than $200k+ at 40 but am continously told I need $3 million to retire, and it's just really defeating. I know part of that is financial advisors wanting to earn fees. But it's never enough, and I think a lot of people think why bother if I need that much when I can enjoy life now.
I'm not even that concerned with retirement. I just hate stuff.
Financial planners usually tell you to invest more, just like insurance agents usually say you need to buy more insurance. It's how they make a living.
I used to be a financial planner so I know how it works.
Think of it this way - A) most people retire, and B) most people have less than $3 million.
If you REALLY needed $3 million to retire, then most people would never retire.
So just keep investing whatever amount you're currently investing monthly and don't stress yourself out about it.
Made 110, 140, and 150k last 3 years. Worked over 3,500 hours/year to do it last two. Quit competitive age-group triathlon last two years to work more (sucks but necessary). Haven’t saved anything other than maxing the ROTH IRA each year. In fact, I’m losing money this year to inflation related expense increases. 100k in savings 35k in emergency. 42 years old 3 kids union job with pension. Health care 15,800/year pension contribution 11%. Live very frugally in a high expense area. Do my best for my kids extra curricular (sports, dance, etc). The people I know doing well are in accounting finance law defense supported (Raytheon, Boeing). The people not doing well are everyone else.
remember only 40% of the US population has a college degree. If you don't have a college degree, you probably have next to zero in retirement savings at age 40. But if you do have a college degree you probably have a quarter million dollars at that age.
the article posted in the op is talking about the median. if accurate, it's a meaningful metric.
No, it's not meaningful. Do you know how many people have exactly $63,000 in retirement savings? A verrrry low percentage. Probably less than 1%.
Even if you expanded that slightly to plus or minus $5,000 and made it a range of $58,000 to $68,000, the percentage of people in that range would still be extremely low, probably less than 5%.
That $63,000 figure was just a number that a reporter used in order to write an article, but it has very little to do with people's real world savings.
Lesson to be learned - Stats, even if mathematically accurate, can be very misleading.
it is meaningful. it means 50% of people have that much or more. it tells you if you are in the top half or bottom half.
I lost my 42k a year job today. Ugh. But I have about 115-120k in total net worth and thankfully no loans. Even on smaller salaries you can save if you are cheap.
What's most interesting about these threads is the wide variance in posters' own status or beliefs as compared to the average, and how they "can't believe the median is so [high or low, depending on their own status]!!"
Just demonstrates the tendency of most people to think most other people are in a similar situation as oneself.
for any person that's been working since let's say 25 years old(assuming they spent their early 20s going to some sort of learning whether it's college, vocational school, trade school what ever)
that means you've managed to save only 63k in 15 years of working.... That comes out to only 4200 a year.... or a very meagre $350 dollars a month... not including the fact that you should have gotten bonuses in that time, salary raises in that time...
Maybe it's cause I come from a financial background, but yeah, that isn't very good at all.
honestly i dont know many people you save $350 a month or can. I have one group of friends that save maybe zero and earn 60k-100k per year and the other group of friends over 150k+ a year that have saved hundreds of thousands but they are single no wife/kids yet. Many that cant save roll into marriage/kids with little savings then the bills just pile up not only from kids but also the wife running up expenses sky high. Most people dont have delayed gratification so they want fancy house,car,marriage everything fast and now so they would rather just pay and have those things instead of save.
Yep. Most people are terrible with money. They pay a premium for discretionary budget items for pleasure and/or status. I think when the millennial generation approaches retirement is when you'll see the first major attempt at something that amounts to government enforced wealth transfers. The same generation that wants their student loans "forgiven" will begin to push a narrative that they deserve a government provided pension beyond SS once they realize they can't afford to retire.
I have 15x the average amount for my age, having put the maximum allowable amount into my 401k for about the first 20-22 years of my career, then dropping down to the minimum that gets me full match for the last 5 years since our expenses are higher now with kids approaching college.
Learn to live on whatever income you have after maxing your 401k. That money piles up slowly but suddenly. The biggest key is to stay employed, and a secondary helper is if you take advantage to work overtime when the opportunity is there. I have a job where I could work almost unlimited overtime if I wanted to. I've averaged about 55 hours a week for the last 27 years. It's not as hard as it sounds.
You should also try to max a medical savings account now that they have them. Medical expenses will wipe you out if anything chronic happens later in your life. My mother is paying $14k a month for my father's health care...good thing they saved $1M in their 401ks or they'd be bankrupt by now.
Made 110, 140, and 150k last 3 years. Worked over 3,500 hours/year to do it last two. Quit competitive age-group triathlon last two years to work more (sucks but necessary). Haven’t saved anything other than maxing the ROTH IRA each year. In fact, I’m losing money this year to inflation related expense increases. 100k in savings 35k in emergency. 42 years old 3 kids union job with pension. Health care 15,800/year pension contribution 11%. Live very frugally in a high expense area. Do my best for my kids extra curricular (sports, dance, etc). The people I know doing well are in accounting finance law defense supported (Raytheon, Boeing). The people not doing well are everyone else.
working 67 hours per week and saving just $6000 per year? Something is very wrong here. You need to get off the hamster wheel, rethink your career and save a lot more money.
Make saving automatic - have $15,000 taken out of your paycheck per year, make sure you drive used cars worth no more than $15kish each, careful on the tech, careful on the vacations etc. If the extra curriculars are costing you retirement, stop spending that money.
Maybe you need a better job too.
This is all up to you. Don't go blaming the system or inflation or whatever. How you spend is up to you. Unless you have some bad luck like a health problem or whatnot.